The Commission's complaint names Nova Gen Company ("Nova Gen") of San Diego, Calif., its current CEO, Margaret Grey ("Grey"), and a sales agent, Paul Randall Fraley ("Fraley"). The complaint alleges that Grey, of San Diego, Calif. and widow of the company's founder, has continued in Nova Gen's unregistered fraudulent securities offering since she assumed control over the company in June 2009.

According to the complaint filed in U.S. District Court in San Diego, Nova Gen falsely claimed to have technology capable of converting coal into bio-diesel fuel, virtually emissions free, and even touted a plant that was up and running. The complaint further alleges Nova Gen disseminated financial statements to investors that depicted $27 million in a brokerage account and net operating income of $21 million. The complaint alleges that, in fact, Nova Gen's technology was not "ready to go," and that it did not have any plant, did not own any brokerage account, and had not generated revenue at any time. The complaint further alleges that Fraley, of Hewitt, W.Va., located potential investors and received sales commissions for his efforts, and falsely told investors that Nova Gen was about to become a publicly-traded company that would pay a guaranteed 11% dividend.

The Commission's complaint charges the defendants with violating the securities registration provisions, Sections 5(a) and 5(c) of the Securities Act of 1933 ("Securities Act"), the broker-dealer registration provisions, Section 15(a) of the Securities Exchange Act of 1934 ("Exchange Act"), and the antifraud provisions, Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, of the federal securities laws. The Commission's complaint seeks permanent injunctions, disgorgement, prejudgment interest, and financial penalties.